Consumer-confidence surveys show increasing concerns about the economy. This means that when asked about the future of the United States, many consumers are worried about growth and job opportunities. But it isn't all doom and gloom and millions are actually thinking of buying homes.
The Conference Board releases results of a consumer-confidence survey each month. In June, the data showed that their consumer-confidence measure fell from 61.7 in May to 58.5. There were declines in what consumers thought about the present economic situation and what they think about the future.
Other questions focus on buying plans instead of opinions. The Conference Board found that 3.7 percent of households plan to buy a home in the next six months. Before the housing bubble collapsed, generally around 6 percent of households would be expecting to buy a home shortly.
Census Bureau data shows that there are more than 110 million households in the United States, so about 4 million will be house shopping before the end of the year. Not all will qualify for a mortgage; in fact, about one-quarter of mortgages applications aren’t being approved, according to recent Federal Reserve data.
We could see sales rise from 4.8 million in May to an annual pace near 6 million by the end of the year.
Consumers may be worried about another recession, but if the survey is correct, we may see a surprising jump in home sales later this year.
In a normal market, we typically saw 6 million sales a year (pre-bubble). That would mean the housing market would be back to normal with a 25 percent jump in sales from the most recent pace, and rising prices are the likely result.
© 2017 Newsmax Finance. All rights reserved.